Question 3 - Direct Cap Method -20 Points Question: Use the Direct Cap Method to appraise the following subject property. Property type: Multi-Tenant Professional Office Gross Building Area (GBA): 8,500 Net Leasable Area (NL): 8,000 Tenant Suite 100 Lease: $16.00/sf/yr/ Gross Lease, Occupies 4,000 sqft Tenant Suite 200 Lease: $14.00/sf/yr, Gross Lease, Occupies 4,000 sqft Subject Vacancy: 0% - Building is fully occupied Market Vacancy: 5% - Common rate for Offices in area Property Tax Expense: $29,997/Yr Management Expense: 3% of Effective Gross Income Insurance Expense: $0.40/sf of Gross Building Area Maintenance Expense: $01.00/sf of Gross Building Area Reserves for Replacement: $0.35/sf of Gross Building Area Cap Rate: 7.00% Calculate the following: 1. Potential Gross Income (PGI) 2. Vacancy/Collection Los (V/CL) 3. Effective Gross Income (EGI) 4. Operating Expenses (Calculate as $ amount and % of EGI) 5. Net Operating Income (NOI) 6. Value of the Subject